OTS Okays IndyMac Acquisition

The Office of Thrift Supervision has approved the acquisition of SGV Bancorp by IndyMac Mortgage Holdings Inc., but has mandated several conditions related to capital for a period of three years. One condition is that IndyMac must maintain an 8% core capital-to-assets ratio. In addition, the risk-based capital ratio must be calculated in compliance with the OTS's rules, except that all subprime loans held for investment or sale must be weighted at double the risk weight prescribed by law. This requirement is expected to raise the capital risk on subprime loans from 5% to 10%. SGV, which is slated to be renamed IndyMac Bank after the acquisition, is expected to gain full operation as an Internet-based financial institution by the end of August. With over $4 billion in assets and a market capitalization of nearly $1 billion, IndyMac Bank is expected to have approximately $415 million of capital in excess of the OTS requirements (including the combined effect of the required conditions). IndyMac's website is http://www.indymac.com/.